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date: 15 September 2019

Institutional Logics

Summary and Keywords

Research on institutional logics surveys systems of cultural elements (values, beliefs, and normative expectations) by which people, groups, and organizations make sense of and evaluate their everyday activities, and organize those activities in time and space. Although there were scattered mentions of this concept before 1990, this literature really began with the 1991 publication of a theory piece by Roger Friedland and Robert Alford. Since that time, it has become a large and diverse area of organizational research. Several books and thousands of papers and book chapters have been published on this topic, addressing institutional logics in sites as different as climate change proceedings of the United Nations, local banks in the United States, and business groups in Taiwan. Several intellectual precursors to institutional logics provide a detailed explanation of the concept and the theory surrounding it. These literatures developed over time within the broader framework of theory and empirical work in sociology, political science, and anthropology. Papers published in ten major sociology and management journals in the United States and Europe (between 1990 and 2015) provide analysis and help to identify trends in theoretical development and empirical findings. Evaluting these trends suggest three gentle corrections and potentially useful extensions to the literature help to guide future research: (1) limiting the definition of institutional logic to cultural-cognitive phenomena, rather than including material phenomena; (2) recognizing both “cold” (purely rational) cognition and “hot” (emotion-laden) cognition; and (3) developing and testing a theory (or multiple related theories), meaning a logically interconnected set of propositions concerning a delimited set of social phenomena, derived from assumptions about essential facts (axioms), that details causal mechanisms and yields empirically testable (falsifiable) hypotheses, by being more consistent about how we use concepts in theoretical statements; assessing the reliability and validity of our empirical measures; and conducting meta-analyses of the many inductive studies that have been published, to develop deductive theories.

Institutional logics are systems of cultural elements (values, beliefs, and normative expectations) by which people, groups, and organizations make sense of and evaluate their everyday activities, and organize those activities in time and space.1 Organizational research on institutional logics is burgeoning. A search of Google Scholar (excluding patents and citations) conducted in March 2016 revealed 11,200 results for the phrase “institutional logics.” To put this in perspective, a similar search for “institutional isomorphism” turned up 27,500 results, while a search for “weak ties” produced 50,800. So while institutional logics is a growing field of research, it is far from the largest in the study of organizations. To be fair, though, research on institutional logics began in the 1990s, one decade later than research on institutional isomorphism and two decades later than research on weak ties, and given past trends, it will continue to expand as time passes.

This article conducts a critical review of this flourishing area of research and offers suggestions to guide future work on this topic.2 It offers several examples to clarify the complex concept of institutional logics, its causes, and its consequences for organizations. This concept has evolved since the 1990s, and it has several intellectual precursors to this concept in sociology and political science. A sample of published work—articles selected randomly from a list created by searching ten prominent management and sociology journals—is analyzed to categorize this work in terms of where authors are located geographically, whether their work is empirical or theoretical, what level of analysis is used (intraorganizational, organizational, field, or societal), and what research questions are asked. This article concludes by suggesting gentle corrections and possible extensions to this literature to guide future research on this topic.

Clarifying the Concept

The rather terse definition given can be expanded on by considering what it means to claim that institutional logics are systems of cultural elements: systems because their elements are connected in a coherent and discernable pattern, cultural because they include values, beliefs, and normative expectations. Individuals, groups, and entire organizations use institutional logics to make sense of and evaluate their everyday activities. Sense-making involves creating a coherent account of the world around us by categorizing the things we see, do, and feel, and applying patterns to connect this to things we’ve seen, done, and felt before, or anticipate seeing, doing, and feeling in the future (for more details, see Weick, 1995). Evaluation involves judging the worth of the people and things we have categorized—individuals, groups, organizations, actions, symbols, material objects, etc.—on one or more dimensions (for a recent review, see Lamont, 2012). Beyond sense-making and evaluation, institutional logics are used by individuals, groups, and entire organizations to order their activities in time and space. This encompasses creating, maintaining, evaluating, and adjusting formal organizational structures (the set of subunits that are assigned responsibility for particular tasks, as well as the flow of tasks and lines of authority that connect subunits), procedures (e.g., processes for hiring, evaluating, rewarding, and firing employees; searching for, acquiring, and using resources to carry out assigned tasks; and surveying the external environment), informal cultures (norms, values, and expectations of behavior), and power distributions (which people, subunits, and organizations have formal authority or informal influence over which others).3

Institutional logics are socially constructed. Social scientists and philosophers have defined social construction in dozens of ways, but all definitions involve social interaction, which creates shared, interpersonal understandings of social objects, rendering them exterior to any individual and therefore seemingly objective (e.g., Berger & Luckmann, 1967; Searle, 1995). This means, for instance, that judging the worth of something is a social process—while we do it, we reflect on the judgements that others have made of the same or similar types of things. The exteriority and objectivity of institutional logics is what makes them institutional: they are perceived as social facts in a Durkheimian way (Durkheim, 1982), as collective representations of reality. Finally, institutional logics are historically contingent. This means they vary over time and across space, depending on the distribution of power among social actors, extant cultural or material technologies, and the objectives of social actors.

Empirical Examples

A few detailed examples will make clear these defining attributes of institutional logics. Haveman and Rao (1997) studied a series of institutional logics that underpinned early thrifts in California, financial institutions that brought people together to save money and use the accumulated savings to build or buy houses. These authors borrowed a phrase from Adam Smith (1976) and labeled these logics theories of moral sentiments because they all incorporated systems of ethics that combined Stoic prudence and self-command with Christian benevolence, similar to the ethics that Smith’s moral philosophy described as guiding the conduct of “prudent men.” The institutional logics underpinning early thrifts consisted of beliefs and values concerning how people should organize saving and home ownership; they were induced from observation of their material instantiations: in what industry participants called plans, which were contracts between thrifts and their members concerning members’ roles and responsibilities, and procedures for regulating how incoming funds were invested and earnings were distributed. Different (but related) theories of moral sentiments shaped different thrift plans’ goals, authority structures, financial-intermediation technologies, and product offerings.

These different thrift plans were developed in succession between the start of this industry in the 1870s and the eve of the Great Depression, which disrupted the thrift industry and forced a fundamental reorganization of the entire financial-services sector. Table 1 summarizes the organizational features and institutional logics of the two plans that dominated the industry at the beginning and end of this period. The first thrift plan, the terminating plan, was a self-liquidating collection of peers who came together at regular intervals to save money, borrowed from the growing communal fund to build homes, and then dissolved their equity association when their joint task was completed. This plan embodied an institutional logic that celebrated mutual cooperation and rigidly structured action; it was predicated on the notion of community as the source of interpersonal trust. The last plan was the Dayton/guarantee-stock plan; as its hyphenated name suggests, it was a hybrid that incorporated elements of two intermediate plans. Led by a cadre of professional managers, this permanent organization distinguished between owners of installment shares (which could be withdrawn at any time, or augmented at any time in any amount) and guarantee shares (capital investment that was non-withdrawable and used to guarantee earnings on installment shares). It also distinguished between savers (owners of installment shares) and borrowers, as not all savers had to borrow to build or buy homes. In sharp contrast to the terminating plan, the Dayton/guarantee-stock plan embodied a logic that celebrated bureaucracy (division of labor by role and time) and voluntary, instrumentally rational action; it was predicated on the notion of bureaucracy as the source of interpersonal trust.

Table 1. Comparing two institutional logics in early California thrifts.

Institutional Logic (“Plan”)

Organizational Features

Terminating Plan

Celebrated Mutuality

• All members played a dual saver/borrower role.

• All members shared the same temporal position: all entered and left the association at the same time.

• Members cooperated to run the association.

• All savers took the same risks and earned the same returns.

Mandated Structured Individual Effort

• Members had to pay in on set schedules and pay in set amounts, or be fined.

• All members were both savers and borrowers.

• Members made periodic dues payments to a common fund; fines were charged for late dues payments.

• Members subscribed to the number of shares with a matured value equal to the value of the loan they wanted.

• Precedence in borrowing was established by bidding.

• When all shares reached their matured value, the association dissolved and assets were divided among members in proportion to the number of shares they owned.

Dayton Guarantee-Stock Plan

Celebrated Bureaucracy

• Division of labor (roles): some members were only savers, others were both savers and borrowers, still others (those contributing guarantee stock) were capital investors.

• Division of labor (roles): managerial cadre distinct from members.

• Division of labor (temporal): members entered and left the association on their own schedule.

Assumed Individual Rationality; Celebrated Voluntary Effort

• Savers chose how much to pay in and when.

• Savers chose whether or not to borrow.

• Savers were in two different risk and return categories: guarantee stockholders took higher risks than installment stockholders and earned higher returns.

• There were two kinds of shares: installment stock could be withdrawn at any time, while guarantee (capital) stock was paid in at time of founding, was used to insure earnings on installment stock, and was not withdrawable. Earnings in excess of contract liabilities accrued to guarantee stockholders, not installment stockholders.

• Each installment account was temporally independent of other installment accounts.

• Savers (members with installment accounts) did not have to borrow.

• Loans were made in order of application; interest rates varied with demand.

• Payment on installment accounts could be made in any amounts at any time.

A second, more contemporary example is an analysis of shifting logics in the San Francisco Bay Area healthcare sector (hospitals, health-maintenance organizations, end-stage renal disease clinics, and hospital systems) after World War II, by Scott, Ruef, Mendel, and Caronna (2000). These authors delineated three models of corporate governance (macro- or societal-level logics) that, at different points in time, led to the use of different meso- or organizational-level logics by healthcare organizations. The era of professional dominance (from 1945 to about 1965) was governed by the association model, in which physicians’ associations exerted normative-legal control over the healthcare sector. Next, the federal responsibility era (from 1965, when the Medicare and Medicaid programs were launched as part of President Johnson’s Great Society Program, to the early 1980s), saw the association model replace the state model, with governmental agencies exercising authority over many healthcare organizations under a rule of law, backed by coercive legal power. Finally, the managerial-market era (from the early 1980s, after passage of the Omnibus Budget Reconciliation Act in 1981 and the Tax Equity and Fiscal Responsibility Act in 1982 during the Reagan presidency, to the end of the 20th century) saw the rise of the market model, in which healthcare organizations competed openly and healthcare organizations’ exchanges with their staff, their patients, and state authorities were governed by contracts. Although these macro-level logics were distinctive, they overlapped, as all three could be observed in all three eras.

In each era, there was a single dominant meso-level logic, which was instantiated in specific organizational structures, procedures, and cultures. In the professional dominance era, under the association model, quality of care, as determined by physicians, was valorized. Healthcare organizations were generally nonprofit community-based entities that were managed by local elites or members of religious orders, and physicians’ professional expertise guided practice. In the federal responsibility era, under the state model, equality of access to healthcare, which was viewed as a basic human right, was celebrated. Healthcare organizations generally remained locally managed nonprofits, but they became more under the control of federal agencies, which not only provided funding but also regulated many aspects of healthcare operations. Finally, in the market era, under the market model, efficiency in healthcare delivery was enshrined as a central value. Healthcare organizations were increasingly likely to be for-profit corporations, managed by professionals toting advanced management degrees who focused on “the bottom line”; formal contracts governed healthcare operations; and terms like “industry” and “provider” replaced terms like “system” and “doctor” in the discourse of healthcare managers and analysts. Table 2 summarizes the three macro models and associated meso logics and organizational features.

Moving some 6,000 miles from California, we consider a study of the rise of nouvelle cuisine in French gastronomy (Rao, Monin, & Durand, 2003). These authors traced the replacement, from the 1970s to the 1990s, of the logic of classical cuisine by the logic of nouvelle cuisine. Classical cuisine valorized conservatism and preservation of connections between dishes and long-ago figures or events (e.g., dishes named after mythological characters or pre-Revolutionary nobility); conformity with the rules codified by chefs Carème and Escoffier in the 18th and 19th centuries; and sublimation of ingredients, meaning physical refinement through established rules and procedures. In contrast, nouvelle cuisine was built on ten commandments centered on the values of truth, light, simplicity, and imagination. Therefore, this logic celebrated creativity and novelty in the invention of new dishes with the chef as the actor with the power to create and express an individual voice through cuisine; transgression of classical prescriptions, such as by combining old techniques with new ingredients (and vice versa) or combining ingredients that had never been put together; and acclimatization, or importing “exotic” ingredients and techniques from foreign culinary traditions.

In practice, these two logics led to the creation of different organizational structures, practices, and power distributions. Under the classical cuisine logic, restaurateurs held power over chefs, who were mere employees, albeit technically skilled ones, and kept in the kitchen, hidden away from diners; menus were long, which required holding large inventories of ingredients that could not be guaranteed to be fresh; the prototypical ingredients were game, shellfish, cream, poultry, and river fish; the production process involved not just chefs and their underlings in the kitchen, but also waiters in the dining room, who conducted elaborate rituals with the food (such as flambéing soufflés and carving game birds); and dining was an elaborate, hours-long event. Under the nouvelle cuisine logic, chefs claimed autonomy over restaurateurs by inventing new dishes, making their kitchens visible to diners, and sometimes by acquiring ownership stakes in their establishments; menus were short, so inventories were small and it was easier to guarantee that ingredients were fresh; the prototypical ingredients were fruits, vegetables, aromatic herbs, and sea fish; the production process was limited to the kitchen, with waiters simply delivering the food; and dining was a simpler and shorter event. Table 3 summarizes these two logics and the organizational features associated with them.

• Production entirely by chefs in the kitchen; waiters simply deliver food

• Dining a shorter ritual

Finally, in a study that extends and complements that of Scott and his coauthors, Heinze and Weber (2016) examined institutional logics in large healthcare organizations. The logic of integrative medicine blends an emphasis on biological science (from the logic of conventional medicine) with a concern for the whole person (from the logic of complementary and alternative medicine), rather than a narrow focus on a particular disease, deformity, or disorder. This hybrid logic combines the professional routines, artifacts, and symbols of its parent logics; for example, treating cancer patients with diets, herbs, acupuncture, and meditation (elements of the complementary-and-alternative-medicine logic) and with chemotherapy and radiation (elements of the conventional-medicine logic). Table 4 lays out the dimensions of the integrative-medicine logic and its organizational consequences, and compares it to the conventional-medicine logic. Although the integrative-medicine logic contains basic elements of the conventional-medicine logic, the former’s underlying paradigm often conflicts with that of the latter, so their coexistence is precarious.

As these examples make clear, empirical research on institutional logics recognizes them as cultural systems deployed to organize activities as well as to make sense of and evaluate those activities. But different papers traced different kinds of empirical links between institutional logics and the organizations that embodied them. Haveman and Rao (1997) emphasized formal structure and the nature of organizational members’ relationships to each other; Rao, Monin, and Durand (2003) accentuated the distribution of power and organizational goals (maintain the status quo versus innovate); Scott and his coauthors (2000) highlighted both formal structure and power; and Heinze and Weber (2016) called attention to professional values, practices, and practitioners’ identities.

Institutional Logics: Theoretical Evolution

Initial Formulation

Although there were scattered uses of the term “institutional logic” from the 1960s to the 1980s (e.g., Warriner, 1961; Maurice, Sorge, & Warner, 1980; Jackall, 1988), the first detailed analysis was conducted by Friedland and Alford (1991). These authors used institutional logics to explain relationships among three nested levels of analysis: individual, organizational, and societal. They proposed that each of the main institutions of modern Western societies—the (capitalist) market, the (bureaucratic) state, (democratic) politics, the (nuclear) family, and (Christian) religion—has a central logic. They argued that institutional logics, which they proposed as societal-level constructs, engender categories, beliefs, and motives that individuals and organizations can use as bases for action. They noted that institutional logics are historically specific—they exist in particular times and places, so we should expect individual and organizational action to differ across time and space.

This theory is explicitly couched in opposition to rationalist theories of management. It holds that institutional spheres set limits on rationality through their associated logics: institutional logics determine both ends and means, both what is valued and how things are valued. Thus there is no truly objective metric for rationality; instead, rationality can be assessed only within the constraints of a particular logic. This suggests a dualism between logic and behavior: behaviors that accord with an institutional logic make sense only in relation to its particular symbolic system, but a logic’s symbolic system makes sense only in terms of the behaviors it elicits or prescribes. Despite this dualism, it is important to distinguish theoretically between institutional logics and associated behaviors because conflating the two makes it impossible to develop testable theories of the causes and consequences of institutional logics.

This theory of institutional logics privileges structure over agency: its three levels of analysis (individual, organizational, societal) are nested, with each higher level structuring action within each lower level. This means that organizations create constraints and opportunities for individual action, while societies create constraints and opportunities for organizational action. But because this theory recognizes that there are multiple societal-level institutions, which are both interdependent and have contradictory logics,4 it can accommodate agency. Individuals and organizations can play one institution off against another by manipulating and reinterpreting symbols in terms of their preferred logic—the logic that offers them the best chance to achieve their desired ends. Yet agency is not always possible. When an institutional logic’s rules and symbols are internalized, meaning they are fully accepted and unquestioned, so no other logic can be conceived of as acceptable (even relevant), resistance to the sole acceptable logic’s prescriptions is not possible—a fan of Star Trek: The Next Generation might even say that in such a case, resistance is futile. In contrast, when an institutional logic is not internalized, individuals and organizations can deploy its rules and symbols as resources, manipulating them to serve their own ends. But which individuals and organizations can succeed at this depends on who has control over those resources and the rules by which those resources are produced, allocated, and controlled.

Reformulation

Thornton and her colleagues (Thornton & Ocasio, 1999, p. 804; Thornton, Ocasio, & Lounsbury, 2012, p. 2) placed greater emphasis on agency than Friedland and Alford. They use the term “embedded agency” to reflect their assumption that while institutional logics constrain the choice sets available to individuals, groups, and organizations, logics also provide opportunities for those actors to socially construct and reconstruct logics in ways that reflect their interests. This implies that while actors are embedded in institutional logics, they are at least partly autonomous from them. Like Friedland and Alford, these authors propose that actors leverage the existence of multiple societal-level institutions; when those institutions are contradictory, actors can play one institution off against another by manipulating and reinterpreting the symbols inherent in one logic in terms of a second, preferred, logic—one that offers superior opportunities to achieve their desired ends.

Unlike Friedland and Alford, Thornton and her colleagues hold that logics are not just societal-level phenomena but rather exist at multiple levels of analysis: within a single organization, between organizations in an industry, in a field or societal sector. If institutional logics exist in a nested hierarchy, then they are both frames for action and products of action (Holm, 1995): individuals, groups, and organizations can use the cultural elements of higher-level logics to create, bolster, transform, or undercut lower-level logics. This reconceptualization paved the way for pushing institutional logics research away from focusing solely on culture and cognition, toward a balance between culture and cognition, on the one hand, and power and status relations, on the other. The attention to power and status relations greatly enriched the theory’s empirical promise.

Given the assumption that logics exist at multiple levels of analysis, it is not surprising that the reformulation of institutional logics by Thornton and her colleagues promoted research at multiple levels of analysis using multiple forms of data and analytical techniques: ethnographic, archival, and interview-based research within a single organization (e.g., Suddaby & Greenwood, 2005; McPherson & Sauder, 2013), archival and interview-based research within a single industry (e.g., Thornton & Ocasio, 1999; Nelson, 2016), and archival and survey-based research within a field, societal sector, or society (e.g., Lounsbury, 2002; Zhou, 2005).

A second important reformulation by Thornton and her colleagues was to decouple institutional logics from institutional orders, which made it possible to conceive of multiple logics as co-existing in an organization, industry, or field, as well as to conceive of a single logic as associated with or derived from multiple institutional orders. In turn, this opened up a burgeoning of empirical and theoretical work on complementary, competing, and plural or hybrid logics. Scholars have probed how organizations respond to multiple institutional logics; for example, by explaining the conditions under which logics will be incompatible and thus actively contested, although no single logic will reign supreme; complementary or aligned and thus coexisting peacefully; or a single logic will dominate and other logics play at most peripheral roles (e.g., Pache & Santos, 2010; Besharov & Smith, 2014). Much of this work has shown the consequences of logic conflict, coexistence, and dominance for important individual, group, and organizational outcomes, such as turnover, interpersonal conflict, creativity, organizational growth, and performance (e.g., Jay [2013] on creativity and innovation; Marquis & Lounsbury [2007] on organizational foundings).

Intellectual Precursors

Constructs related to institutional logics have a long history in the social sciences. This is not surprising, as scientific theories build on previous ones (Merton, 1965). And there is considerable, if imprecisely defined, overlap and interdependence between these constructs. Again, this is not surprising, as most social-science theories (certainly most sociological theories) are natural-language theories, which are inherently more ambiguous than formal (mathematical) theories. Precursors are surveyed in chronological order, in order to trace their temporal development and note interdependencies among them. This survey is non-parochial, in that some of the concepts analyzed come from cultural anthropology rather than sociology, but it is not universal, as it stays away from cognitive linguistics, which is seldom used by those who study organizations.5

The earliest precursor to institutional logics is Weber’s idea of the Protestant ethic—the moral view that individuals should strive to achieve success through hard work and thrift, and that success is an indicator of divine grace—which he argued was a key driver of the rise of capitalist enterprise in Western society (Weber, 1958, 1946). More generally, Weber analyzed “value spheres,” which included religion, the economy, politics, the erotic, science, and the family (Weber, 1946)—a list very similar to the list of institutional spheres proposed by Friedland and Alford (1991).

Weber’s (1978) ideas about domination and legitimate authority inspired Bendix’s (1956) work on managerial ideologies in capitalist enterprises in England, Russia, East Germany, and the United States. To understand industrialization, Bendix examined ideas concerning the nature of work in industrial organizations, managerial authority in those settings, and justifications for the subordination of workers to managers; in doing so, his investigation focused on rationalizations—reasons for worker domination, which form the basis of legitimate authority (as opposed to naked power). There were two audiences for these rationalizations: the ruling elites and workers. Inspired by Weber and Bendix, Guillén (1994) analyzed managerial ideologies in the United States, Britain, Spain, and Germany from the late 19th century to the late 20th century, examining the ideas proposed by those who wrote about how management was and should be practiced, and how employing organizations were and should be designed. He categorized some 39 scholars’ ideas into three groups of models of management—scientific management, human relations, and structural analysis—and probed how these models rationalized (justified) hierarchical authority in firms and shaped managers’ decision-making and actions. As well as assessing these models’ ideological features, Guillén detailed the organizational structures and procedures they prescribed.

Closely related to managerial ideologies are Fligstein’s (1990, 2001) conceptions of control in large American corporations: “totalizing worldviews” (1990, p. 10) that cause organizational decision-makers to filter information in a certain way. Decision-makers use these conceptions to make sense of the structures and actions of organizations and relations between organizations and their suppliers, customers, and employees. In succession, four conceptions of control, each of which highlighted the importance of a different management function, dominated large American corporations: manufacturing (the firm’s primary goal is to produce goods and services without interference from competitors; appropriate tactics include controlling inputs and outputs through vertical and horizontal integration), sales and marketing (the firm’s primary goal is to sell as many goods and services as possible; appropriate tactics include product differentiation and innovation), finance (the firm’s primary goal is to increase profits; appropriate tactics include conglomerate mergers and acquisitions), and shareholder value (the firm’s primary goal is to maximize share price; appropriate tactics include downsizing and focusing on “core competencies”). Over time, the rise and fall of this series of conceptions of control was driven by changes in legal regimes and macroeconomic conditions. The Sherman Antitrust Act of 1890 placed severe constraints on mergers that increased market share and reduced competition, prompting the decline of the manufacturing conception of control and the rise of the marketing and sales conception. After World War II, changes in antitrust laws that promoted product-related and product-unrelated mergers led to the decline of the marketing and sales conception and the rise of the finance conception. In the late 1970s, international competition and declining U.S. stock markets prompted the decline of the finance conception and the rise of the shareholder value conception. Because conceptions of control are germane to large American corporations, they all lie within a single institutional sphere (the economic) and so are variations of a single institutional logic (market).

Similarly, March and Olsen (1989, 2008) juxtaposed two logics of action in government, which they conceived of being used to describe, explain, justify, and criticize behavior: the logic of consequences and the logic of appropriateness. The first is a basis for decision-making in which self-interested rational actors with fixed preferences and identities first calculate expected returns from alternative choices and then choose the alternative that maximizes returns net of costs. The second is a basis for decision-making in which actors develop preferences through learning that takes place within specific institutional (historical) contexts; these preferences reflect historically specific norms, expectations, and rules. Basically, actors prefer whatever outcomes deemed normatively appropriate. Because institutional norms, expectations, and rules are perceived as legitimate—acceptable, valid, right, good, and natural—actors are unselfconsciously guided by them. In this formulation, institutional (historical) context severely limits free will and calculation.

Other conceptual developments were considerably more micro in focus. Mills explicated relationships among logics, motives, and social context (Mills, 1939, 1940). He argued persuasively that all logics used to justify action are socially constructed—they are products of a mental dialogue and are created in response to an imagined audience; to be accepted as logical, they must accord with audiences’ normative conceptions of “good reasoning” (Mills, 1939, p. 673). Deviations from those norms are denigrated as illogical—foolish and unpersuasive. He also recognized that logics are historically contingent—they vary from era to era and from situation to situation. This suggests there is no “ground truth”—no universally true and coherent standard against which all local logics can be judged, which makes it difficult, if not impossible, to compare logics that derive from different contexts; in this, Mills’s thinking was similar to that of Friedland and Alford (1991) (see also Berman, 2015). Mills also reiterated the socially constructed and historically contingent nature of the motives that articulating logics reveals. Motives, he declared, are accepted justifications for action; people use language to justify their actions to their audiences, and the vocabulary used to articulate those motives-cum-justifications must be specific to both audience and context.

In the same vein, Geertz wrote about ideologies, “systems of interacting symbols, . . . patterns of interworking meanings” that help to “render incomprehensible social situations meaningful” (Geertz, 1973, pp. 207, 220) and structure purposive action. The symbolic elements of ideologies include stylistic devices such as metaphors, oxymorons, and personifications; syntactical devices such as inversion and repetition; prosodic devices such as rhyme, rhythm, and alliteration; and literary devices such as irony and sarcasm. Ideologies also often include literal elements, such as assertions of fact. Ideologies do not shape thought and action directly, but rather indirectly: when people interact (talk, write, work together), they make sense of the meaning of ideological elements collectively, which then guides their decision-making.

Similarly, Goffman (1974) developed a theory of frames, which he defined as “schemas of interpretation” that make it possible for people “to locate, perceive, identify, and label” things that happen around them (p. 21), and so shape individual and collective attention and drive action. But the concept of frame is not purely cognitive—instead, it is interactional, constructed through people talking and acting together. Over the past three decades, scholars of social-movement organizations have actively deployed this concept to explain how and why movements develop, evolve, and succeed at achieving their goals. As one review of this work argued, “frames help to render events or occurrences meaningful and thereby function to organize experience and guide action” (Benford & Snow, 2000, p. 614).

Finally, Douglas (1986) explained how institutions think and how human thought itself is dependent on institutions. Institutions think by classifying things (including people), defining which things are similar and which are not; these classifications become the basis for human action, as people make rational cost-benefit calculation using these classifications, without questioning them. Institutions think by analogy; analogies stabilize institutions by making them legitimate, normal, and endowed with “self-validating truth” (p. 48). Analogies make institutions appear to be rooted in nature rather than in some sort of socially contrived arrangement. Institutions that are, “found in nature and therefore, in reason, are ready to stand as the grounds of argument” (p. 52). Institutions think most persuasively when their components are coherent: the use of a single principle or a set of closely related principles reinforces each element of the logic. Note that this theory explicitly confers agency on institutions: they shape people’s thoughts and actions.

Precursors Compared to Institutional Logics

Reflecting the validity of Merton’s (1965) view of science as a cumulative, large-group task, in which all scholars stand on the shoulders of the giants who preceded them, it is not surprising that the two main theoretical statements about institutional logics—Friedland and Alford (1991) and Thornton, Ocasio, and Lounsbury (2012)—cite most, if not all, of these intellectual precursors. Social scientists have developed so many related concepts because they have all been studying a fundamental aspect of social reality. And because this aspect of social reality is cognitive (it involves thought and emotion), the concepts scholars developed to study it are intangible and immaterial. Such concepts are more difficult to operationalize than tangible and material concepts such as organizational size or innovation, and thus more prone to conflation and confusion.

While the concept of institutional logics is similar to—indeed, theoretically dependent on—these precursors, it is different from each in important ways. Table 5 compares core attributes of institutional logics (both the original formulation by Friedland and Alford, and the reformulation by Thornton, Ocasio, and Lounsbury) with the attributes of its precursors. As this table shows, all of the concepts surveyed here are similar to institutional logics in that they are cognitive phenomena. Like the original formulation of institutional logics, two precursor concepts (the Protestant ethic and value spheres, and thinking institutions) were conceived as societal (supra-organizational) phenomena. Several other precursors (managerial ideologies, conceptions of control, and logics of action) were conceived of as organization-level phenomena, and the remainder (vocabularies of motive, logics, ideologies, and frames) were developed as micro-level phenomena, applied to individual behavior, or at most macroscopic, to interaction between a hypothetical individual and his or her audience, and not conceived of as applicable to higher-level systems. Several precursor concepts (the Protestant ethic, value spheres, ideologies, conceptions of control, thinking institutions, and logics of action) not only emphasize the power of culture to drive human and organizational behavior, but work on these concepts specifies the cultural content of logics. But some of these concepts were proposed as germane to limited arenas of life (the Protestant ethic to religion and the economy, managerial ideologies and conceptions of control to large corporations, and the logic of appropriateness to political behavior), so they are best classified as special types of institutional logics.

Table 5. Institutional logics and precursor concepts.

Concept

Author(s)

Cognitive?

Level(s) of Analysis

Empirical Scope

Specifies Cultural Content?

Institutional logics (1)

Friedland & Alford

Yes

Society

General

Yes

Institutional logics (2)

Thornton, Ocasio, & Lounsbury

Yes

Individual/Organization/Society

Protestant ethic

Weber

Yes

Individual/Society

Religion/economy

Yes

Value spheres

Weber

Yes

Society

General

Yes

Vocabularies of motive

Mills

Yes

Individual

General

No

Logics

Mills

Yes

Individual/Group

General

No

Ideologies

Geertz

Yes

Individual/Group

General

No

Frames

Goffman

Yes

Individual/Group

General

Yes

Thinking institutions

Douglas

Yes

Individual/Society

General

No

Managerial ideologies

Bendix; Guillén

Yes

Organization

The economy

Yes

Logics of action

March & Olsen

Yes

Organization

Politics

Yes

Conceptions of control

Fligstein

Yes

Organization

The economy

Yes

The Evolution of Research on Institutional Logics

Figure 1 charts the rise of this line of research, based on a search for the phrase “institutional logics” on Google Scholar that was conducted in March 2016. There were a few scattered studies that mentioned institutional logics before Friedland and Alford’s 1991 book chapter was published: 24 between 1980 and 1989, 37 in 1990. Work on this topic began to take off in 1997, when there were 95 studies, and accelerated rapidly after that point, with the number of studies growing to 350 in 2004, 706 in 2010, and 1,150 in 2015.

Source: Google Scholar. Search conducted by the first author March 11, 2016.

To delve into the content of this research, we read and coded a sample of articles published in ten prominent sociological and management journals, which are listed in Table 6. We chose this sampling strategy because journals are the central scholarly outlet for academic research in management, and since the early 1990s they have become increasingly important for scholars on both sides of the Atlantic. Our search covered work published between 1990 (the year before Friedland and Alford’s chapter was published, and the year research on this topic took off) and March 2016. We searched using the phrase “institutional logics” because using the individual words “institutional” and “logics” yielded several irrelevant articles. We limited the search to prominent English-language, general sociology and management journals. The search yielded a total of 126 articles. We created a list, sorted it alphabetically by the last name of the first author, and selected a 33% systematic sample, starting with the second paper on the sorted list and selecting every third article. This yielded a sample of 42 articles that we read to analyze in depth.6

Table 6. Journals searched for articles on institutional logics.

Management Journals

Sociology Journals

Academy of Management Journal

American Journal of Sociology

Academy of Management Review

American Sociological Review

Administrative Science Quarterly

European Sociological Review

Organization Science

Sociology

Organization Studies

Social Forces

Table 7 provides descriptive statistics for the 42 articles. Nearly two-thirds were published in European journals. Most articles were empirical. The level of analysis of institutional logics varied widely, with the most common being intraorganizational (within organizations) and inter-organizational (between organizations). The content and context of the institutional logics analyzed in these articles also varied widely, including Japanese housewives’ identities (Leung, Zietsma, & Peredo, 2014); gay, lesbian, bisexual, and transgender ministers’ negotiation of contradictory logics between their churches and their own sexual orientation (Creed, DeJordy, & Lok, 2010); the collapse of the Communist Party’s ideology in the Soviet Union (Deroy & Clegg, 2015); and values and practices in academic management publishing (Symon, Buehring, Johnson, & Cassell, 2008). Reading these 42 articles revealed three prominent themes—institutional work, competition, and plurality—that are discussed in turn.

Table 7. Sampled articles: descriptive statistics.

Article Characteristic

Number of Articles

Percentage of the Sample

Location: European journal

26

61.9%

Location: American journal

16

38.1%

Type: Empirical

36

85.7%

Type: Theoretical

6

14.3%

Level of analysis: Individual

8

19.0%

Level of analysis: Within organization

10

23.8%

Level of analysis: Between organizations

11

26.2%

Level of analysis: Field/sector

4

9.5%

Level of analysis: Nation

3

7.1%

Level of analysis: Multiple

6

14.3%

Theme: Institutional work

7

16.7%

Theme: Competing logics

13

31.0%

Theme: Pluralistic/hybrid logics

9

21.4%

Institutional Work

One-sixth (7 of 42) of the articles in our sample covered this topic in a significant way. Institutional work consists of actions taken by individuals and groups within an organization that are intended to create, maintain, transform, or disrupt institutions, which therefore affect their associated logics. Such actions are strategic because they are intended to achieve particular goals. In this line of research, institutional logics are often the outcome to be explained and institutional work is the explanatory factor. This line of research is microscopic, operating at the intraorganizational level and analyzing everyday actions and interactions, often using qualitative methods to analyze ethnographic, interview, or archival data.

For creating new or alternative logics, there are 10 forms of institutional work, including reconstructing rules or regulations (“advocacy”), reconfiguring belief systems (“constructing identities” and “changing norms”), and re-imagining categories and boundaries of meaning-making (“mimicry,” “theorizing,” and “educating”) (Lawrence & Suddaby, 2006). For example, French chefs in the 1970s reconstituted their roles and power by becoming chef-owners, which changed norms concerning restaurant practices and products, such as how long menus should be and what flavor should be emphasized. In the end, they created a new institutional logic for French fine food, “nouvelle cuisine” (Rao, Monin, & Durand, 2003).

Maintaining an existing institutional logic requires actions that support the existing logic, including enabling, policing, deterring, celebrating and critiquing, mythologizing, and embedding and routinizing (Lawrence & Suddaby, 2006). For example, high-status consulting and law firms engage in “cultural matching” during hiring: decision-makers identify good and bad job candidates based on shared cultural experiences, including school prestige, extracurricular activities, and academic majors (Rivera, 2012). If interviewers attended the same schools as job candidates or shared extracurricular interests, such as playing squash or traveling in Europe, interviewers were more likely to recommend that candidates move on in the hiring process. These actions maintain a logic of “fit” by policing the inclusion and exclusion of new employees, valorizing and accepting particular traits and tastes that match those of current employees, and critiquing or excluding unmatched traits and tastes.

Disrupting or transforming an existing institutional logic involves undermining the factors that inspire actors to comply with that logic. This involves deinstitutionalization (Oliver, 1992), which is brought about by disconnecting the sanctions and rewards associated with the existing logic, dissociating moral foundations from that logic, or undermining the assumptions and beliefs of that logic; this process may also involve the introduction of a new logic from another institutional sphere or the creation of an entirely novel logic. For example, the logic of conventional medicine was disrupted by the introduction of the new logic of integrative medicine (Heinze & Weber, 2016), which led to much questioning of the assumptions and beliefs of the logic of conventional medicine. But disruption may not entirely wipe out the existing logic, as in the example of integrative medicine, which did not entirely eradicate the logic of conventional medicine. Another example is the Canadian province of Alberta, where a new government instituted changes in funding that eroded the logic of medical professionalism centered on physicians and ushered in a new logic of business-like care centered on regional health authorities (Reay & Hinings, 2005).

Almost one-third (13 of 42) of the articles in our sample discuss competing logics. If institutionalization is a process, rather than an end state (Tolbert & Zucker, 1996), then not all logics are stable or fully institutionalized, and not all contexts (individual organization, industry, or societal sector/field) are dominated by a single, uncontested logic. Some research on competing logics has explained the conditions under which organizational change can occur and the mechanisms driving change. For example, a wave of bank acquisitions in the United States from the mid-1990s to the early 2000s, which was driven by the logic of efficient geographic diversification, led those who supported the logic of community banking (local bankers) to actively oppose such acquisitions by launching new local, community-focused banks (Marquis & Lounsbury, 2007). Other research has demonstrated how individuals, groups, or organizations adjudicate between competing logics. For example, in reinsurance trading markets, employees balanced coexisting logics through three mechanisms: segmenting, bridging, and demarcating (Smets, Jarzabkowski, Burke, & Spee, 2015). Both the nature of institutional demands and organizational strategies determine how organizations will respond to competing logics (Pache & Santos, 2010).

One-fifth (9 of 42) of the articles referred to plural logics, focusing on situations where multiple logics can coexist (at least somewhat) peacefully, and are sometimes combined. For example, in a public-private energy-industry alliance, people grappled with very different logics of success; as they confronted outcomes that were successes when viewed through the logic of public service, but failures when viewed through the logic of client service, alliance participants were forced to synthesize the logics into a new one (Jay, 2013). In turn, this synthesis brought new perspectives to participants’ sense-making activities, which facilitated innovation.

A variant of work on plurality discusses hybrid logics, which combine elements of two or more logics. Two examples of plurality have already been discussed: the work on early thrifts, where the logic that eventually came to dominate was a hybrid of two earlier logics (Haveman & Rao, 1997), and the work on the logic of integrative medicine, which itself was a blend of ideas from conventional and alternative medicine (Heinze & Weber, 2016). In banking, a new hybrid organizational form has gained considerable attention—the microfinance organization, which combines a development logic that guides a mission to help the poor with a banking logic that requires profits to support ongoing operations (Battilana & Dorado, 2010). Microfinance organizations succeeded when they created an identity that balanced these two logics and their concomitant goals.

Gentle Criticism and Suggestions for Future Research

Logics as Cultural and Material Phenomena?

Both Friedland and Alford (1991) and Thornton and her colleagues (Thornton & Ocasio, 1999; Thornton, Ocasio, & Lounsbury, 2012) wrote of institutional logics as encompassing cultural symbols and material practices, although Thornton and her colleagues placed much more emphasis on material practices than Friedland and Alford. But definitions of logics as both cultural and material phenomena are problematic. If we are to take the terms we use seriously, we have to admit that logics are cognitive constructs—socially constructed schemas, shared understandings, (preconscious, subconscious, or conscious) rationalizations. Logics are not material constructs: they are not organizational structures, practices, or policies, nor are they rituals or roles. All of those material phenomena are consequences of human action guided by logics: they are manifestations of logics, not logics themselves. In other words, logics are often empirically observed through these material phenomena. In addition, these material phenomena shape institutional logics, as their very existence (not to mention their prevalence) can support a logic, transform it, or challenge it. Therefore, we caution readers that conceiving of material practices and structures as different from but related to logics (as both consequences of and supporters of logics) is conceptually cleaner than combining cognitive and material elements into a single, and therefore ontologically heterogeneous, concept.

The Role of Emotion

Because institutional logics are, fundamentally, cultural phenomena, most previous research has taken them to be purely rational constructs—even if the rationality they engender is not a logic of means/ends (pure instrumentality), but rather a logic of appropriateness, due to bounded rationality (March & Olsen, 1989, 2008). But limiting the conception of institutional logics to pure, “cold” cognition limits the scope of research and the power of these constructs. After all, institutional change, one of the core foci of this line of work, both requires and evokes great passion (Friedland, 2015). Research on the role of emotion could be enriched by examining the affective components of institutional logics. But that requires recognizing that institutional logics encompass all four of Weber’s (1978, pp. 24–26) orientations toward action: instrumental rationality (Zweckrationalität, instrumental means for achieving some ends), value rationality (Wertrationalität, means that are ends in themselves—for aesthetic, ethical, or religious reasons), tradition (Tradition, means that are ingrained habits), and emotion (Affekt, means determined by affect and feeling states).

To bring emotion into research on institutional logics, researchers could build on work in cognitive psychology, which recognizes both “cold” (purely rational) cognition and “hot” (emotion-laden) cognition. This work shows that emotionally “hot” ideas and arguments are more salient and more deeply embedded in social institutions, and thus more powerful causal forces (for a review, see DiMaggio [1997]). Recent research demonstrates the value of paying attention to emotion. A wide array of political, civic, and religious organizations shaped the public understanding of Islam after the September 11 attacks; claims about the nature of Islam (i.e., claims about that faith’s underlying rationale) that were more emotional garnered more media attention (Bail, 2012, 2015). Fringe organizations (those whose messages employed unusual claims about the nature of Islam) were able to leverage their emotion-laden communications to dominate media coverage, even when faced by competition from more mainstream organizations (those whose messages employed very common claims about the nature of Islam), who tended to shun emotion-laden terms.

Accumulation

Those who study institutional logics are, like all social scientists, doing science. Science improves through the accumulation of knowledge. There has been a proliferation of research about institutional logics on ever-more-specialized topics, but there has not been any appreciable accumulation of knowledge, either within topic or overall. We cannot make progress by simply adding more studies to the pile. Instead, we must integrate the knowledge gained from prior studies with subsequent studies, or else we are in danger of reinventing the wheel, of making institutional logics nothing more than an empty buzzword (see Thornton & Ocasio, 2008 for a similar complaint).

Thornton and her colleagues were careful to speak of this research as a “perspective” (Thornton, Ocasio, & Lounsbury, 2012), recognizing that it had not crystallized into a theory, meaning a logically interconnected set of propositions concerning a delimited set of social phenomena, derived from assumptions about essential facts (axioms), that details causal mechanisms and yields empirically testable (falsifiable) hypotheses (Merton, 1968, pp. 39–72). And they called for development of empirically testable theory that specifies causal mechanisms (e.g., Thornton & Ocasio, 2008, p. 120). Yet the collection of propositions associated with this perspective has become quite scattered; some contradict others (but have not been settled by empirical study), while others are only loosely connected. This makes it difficult, if not impossible, to develop a theory.

Developing a theory (or multiple related theories) will require being clear and consistent about how we use concepts in theoretical statements. If institutional logics are everywhere, meaning everything and explaining everything, then they are nowhere, mean nothing, and explain nothing (see also Haveman [2000] on similar problems with the concepts institution and institutionalization). Our reading of this work yields a sizable (and ever-growing) list of overlapping concepts including (1) institutional spheres and institutional logics; (2) embedded agency, institutional work, institutional entrepreneur, and institutional identity; (3) material practices and vocabularies of practice; (4) competing logics, hybrid logics, and plural logics; (5) institutional pillars and institutional carriers. As this list (which does not include all the concepts used by scholars doing this work) suggests, developing theory will also require forbearing from minting new concepts for the sake of “advancing theory,” as the proliferation of concepts that are not interconnected logically and causally retards the development of theory. For example, we don’t need both “hybrid” and “plural” logics because these terms refer to essentially the same phenomena.

Developing a theory will also require being clear and consistent about how we operationalize concepts. This will entail a far greater concern for measurement than we have observed in most (although not all) studies, with regard to construct validity and reliability. Construct validity refers to the extent to which we are actually measuring what we intended to measure—whether our empirical observations accurately and precisely capture the meaning of our theoretical constructs. How do we really know that what you’re studying is a logic, and an institutional (shared, objective, and exterior) one at that? Perhaps more important, what is not a logic? Can every set of ideas be considered a logic? To assess construct validity, we must rigorously assess the correspondence between our empirical observations and our theoretical constructs (Cook & Campbell, 1979; Schwab, 1980). We cannot calculate this correspondence because theoretical constructs are not “real” in any empirical sense. Instead, we must resort to gathering indirect evidence about it. We can also assess subtypes of construct validity: convergent and discriminant validity. The first is the strength of the relationship among ratings, gathered independently of one another, where measures should be theoretically related; the second is the lack of a strong relationship among measures that theoretically should not be related. This involves measuring associations between the focal construct’s measure and (i) measures of other constructs that theory predicts are related to it (to assess convergent validity) or (ii) measures of other constructs that theory predicts are different from it (discriminant validity).

Reliability is a matter of consistency or repeatability in measurement (Singleton & Straits, 2010). If you measured a logic over and over, would you get the same answer? To assess reliability, you need to compare measures—either over time, across measurement strategies, or by instruments—and calculate associations. For instance, if you measure an institutional logic using qualitative coding of textual data, you should have two (or more) people do the coding and then assess inter-rater reliability—the extent to which coders agree, their consistency. If you are measuring a logic using archival data (qualitative or quantitative), you should compare measures on different samples of data—for example, early versus later in historical time. Psychologists have developed tests for reliability (e.g., Cronbach, 1951) that can be easily applied to this topic.

Last, developing theory will require making predictions that are empirically falsifiable, so we can test not only the empirical validity of theoretical claims but also their scope conditions—the times, places, and types of organizations where they do not hold. As our review of papers published in prestigious management and sociology journals revealed, many studies of institutional logics are inductive. One way to develop hypotheses based on these studies would be to conduct a rigorous meta-analysis. For a guide, see, Rosenthal (1995); for a role model, see a meta-analysis of 156 sociological studies of work and organizations, mostly ethnographic (Hodson, 2001).

Conclusion

The study of institutional logics—systems of cultural elements (values, beliefs, and normative expectations) by which people, groups, and organizations make sense of and evaluate their everyday activities, and organize those activities in time and space—is booming among management and organizations scholars on both sides of the North Atlantic, although it seems to be studied more frequently by scholars in Europe than those in North America. This review clarified the meaning of this construct, traced its theoretical origins and evolution, surveyed the literature (primarily but not exclusively in journal articles), and offered suggestions to push this line of research in fruitful directions. The ideas underpinning this line of research are quite powerful—as evidenced by their analysis in so many and so highly varied empirical settings—but that power needs to be harnessed strategically to be productive. Basically, we need to close the induction-deduction loop and derive from the many, many descriptive studies of institutional logics testable (i.e., falsifiable) hypotheses that will allow us to determine which findings are generally applicable and which are idiosyncratic to a particular research site. We also need to more stringently assess the validity and reliability of our measures, so we can apply these measures to multiple empirical sites. Taking these steps will speed up the accumulation of knowledge about these powerful elements of organizational life.

References

Bail, C. A. (2012). The fringe effect: Civil society organizations and the evolution of media discourse about Islam since the September 11th attacks. American Sociological Review, 77(7), 855–879.Find this resource:

DiMaggio, P. J. (1991). Constructing an organizational field as a professional project: U.S. art museums, 1920–1940. In W. W. Powell & P. J. DiMaggio (Eds.), The new institutionalism in organizational analysis (pp. 267–292). Chicago: University of Chicago Press.Find this resource:

Notes:

(1.)
As we explain and justify, this definition is narrower than that proposed by other theorists (Friedland & Alford, 1991, pp. 248–249; Thornton, Ocasio, & Lounsbury, 2012, p. 2).

(2.)
Although there are several precursors to institutional logics in the sociological and political science literatures on organizations, culture, and the economy—notably the Protestant ethic (Weber, 1958) and value spheres (Weber, 1946); language, logic, and vocabularies of motive (Mills, 1939, 1940); ideologies (Geertz, 1973), including managerial ideologies (Bendix, 1956; Guillén, 1994) and conceptions of control (Fligstein, 1990, 2001); logics of action (March & Olsen, 1989, 2008); frames (Goffman, 1974); and institutional thinking (Douglas, 1986)—this review touches only briefly on those ideas. The main focus is narrowly on research that is explicitly identified as being about institutional logics, by using that phrase.

(3.)
In our view, structures, procedures, cultures, and power distributions are all manifestations of logics, not logics themselves. It is logics that determine the shape of these organizational elements and their relationships with each other.

(4.)
The previous examples provide empirical support for the assumption of multiple, often conflicting, logics.

(5.)
In an effort to conserve space, this survey also ignores several related constructs in sociology; notably, justifications of worth (Boltanski & Thevenot, 2006), theorizing (Strang & Meyer, 1993), and models of art museums (DiMaggio, 1991); Thornton, Ocasio, and Lounsbury (2012) discuss all of these. This survey also ignores organizational research on categories; for a review of this work and discussion of its relationship to institutional logics, see Negro, Koçak, and Hsu (2010).

(6.)
The list of 126 articles, with the 42 sample articles highlighted, is available from the first author on demand.

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